Economics Editor, The Age

Leaving to head the Bureau of Statistics: David Gruen. Photo: Stephanie Kelly

The federal Treasury is to lose its two top officials in coming months.

Deputy secretary David Gruen will leave to head the Bureau of Statistics. His boss, Treasury Secretary Martin Parkinson, leaves in December as part of an agreement with the government to stay on until the G20 international leaders meeting in November.

The departures will leave a void at the top of the government's chief economic adviser, along with considerably thinned ranks at the bottom.

Dr Parkinson told a Senate hearing last month that when he was appointed secretary in 2011 he had 1053 staff. He has since removed one third of them.

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"That is one in three staff … without any reduction in the span of responsibilities,'' he told the hearing. He said there was a risk the Treasury would "end up doing the job worse than we have in the past".

Three weeks ago he wrote to Treasury staff saying the latest round of voluntary redundancies had fallen short and that he would need further involuntary redundancies in order to save 30 full-time salaries.

Colloquially known as the Treasury's chief economist, Dr Gruen is equal number two in the Treasury hierarchy alongside the heads of the fiscal policy, markets, revenue and policy groups. His formal title is executive director (domestic) macro-economic group.

With then treasury secretary Ken Henry, he crafted the economic stimulus measures Kevin Rudd introduced in response to the global financial crisis.

Originally a biophysicist, he took up economics later in life and so emulated his father, Fred Gruen, who was one of the academic economists who worked as an adviser to prime minister Gough Whitlam in the 1970s.

The Bureau of Statistics has been without a chief for six months. Shortly before leaving in January, Mr Gruen's predecessor as ABS chief, Brian Pink, warned that its capital budget was barely adequate to "keep the lights on".

The ABS moved to cut 100 staff earlier this year and has culled many of its surveys. It is trying to conserve what money it has in order to modernise its 30-year old computer systems in order to prepare for Australia’s first predominantly on-line census in 2016.

Dr Parkinson’s departure was announced shortly after the Abbott government took office along with those of other departmental secretaries who left immediately. He was permitted to stay on until the May budget and then had then had that term extended until the conclusion of the G20. He will not seek a further extension.

The departures provide an opportunity for the Coalition to remake the top echelon of the Treasury, although the only formal role it will have will the appointment of the Secretary.

Names mentioned as candidates include Philip Gaetjens, secretary to the NSW treasury and a former chief of staff to treasurer Peter Costello; and Peter Boxall, also a former chief of staff to Peter Costello in opposition. He ran the finance department under John Howard and headed the department of employment and workplace relations during the introduction of WorkChoices.

Other names include Mike Callaghan, head of the G20 Studies Centre at the Lowy Institute and a long-serving treasury official who was also chief of staff to Peter Costello.